Import Trade Prices of steel products cut by 24-30 percent

[Naveed Yaseen]

RIZWAN BHATTI
KARACHI (March 14 2009): Customs Valuation on Friday announced reduction in the Import Trade Price (ITP) of secondary steel products by 24-30 percent due to the declining price trend in the world market, sources said. However, the new ITP of secondary flat rolled steel products is unrealistic and still about 50-200 dollars per tonne higher than the ITP of prime quality steel products and actual value of secondary flat products, sources added.

In addition, customs has also fixed two different types of ITPs for the November-December and January-February imports, which would create more problems for the imports as well as customs authorities for the examination purposes, they said.

Steel prices in the international market are on decline for last six months, therefore importers were demanding reduction in the ITP of secondary flat steel products as per reduction in the prices, which was not made by customs without mentioning any reason.

Although, on the importers demand, customs reduced the ITP of three flat rolled products including Hot Rolled (HR), Cold Rolled (CR) and Galvanised Products (GP) by 24-30 percent, however, the reduction is not in line with international market and still higher than the ITP of prime quality steel.

At present, the price of secondary HR stood at 350 dollars per tonne, CR at 375 dollars per tonne and GP some 400 dollars per tonne in the world market and importers were also demanding the same price as valuation price. However, customs has fixed ITP of HR, CR and GP some 630 dollars, 666 dollars and 657 dollars per tonne respectively for the November-December imports.

Similarly, for the January-February imports, customs has announced 439 dollars, 494 dollars and 683 dollars per tonne ITP for HR, CR and GP respectively. Sources said that miscalculation by the customs authorities has made high ITP, as they have used eight months old prices of North America for ITP fixation, when the prices of secondary steel products were on the higher side.

Despite the current reduction, the new ITPs of secondary steel products are some 23-50 dollars higher than the prime quality flat steel product. Prime quality HR is being cleared at 415-425 dollars per tonne, CR 445-470 dollars per tonne and GP 610-625 dollars per tonne. While, the new ITP is also 90-200 dollars per tonne higher than the actual prices of these steel products, importers said.

The newly announced ITP of HR is some 90 dollars higher than the actual price, as HR price in world market stood at 350 dollars per tonne as compared to new ITP of 438 dollar, they informed.

In addition, new ITP of secondary CR is also 125 dollars per tonne higher than its real price, which is some 375 dollars per tonne in international market over the new ITP of 494 dollars per tonne, they added. Similarly, the ITP of prime GP has been fixed at 583 dollars per tonne against the actual price of 400 dollars, depicting a difference of 183 dollar. Importers said that unrealistic fixing of the ITP values of steel flat product for duty purposes would cause billions of rupee loss to the exchequer.

http://www.brecorder.com/index.php?id=6139